$24 billion USDA pandemic relief program failed to help most farmers
WASHINGTON — When the pandemic struck, Cricket Jacquier had 1200 cows to milk a day but his usual milk buyers were gone.
Widespread closures of schools and restaurants slammed the dairy industry hard, forcing some producers to have to dump perishable milk that suddenly had no market. But for Jacquier, a farmer in East Canaan, Conn., help swiftly arrived.
To assist farmers like Jacquier weather the pandemic as it upended agricultural markets, supply chains and labor practices, Congress created a special relief program through the U.S. Department of Agriculture. Jacquier received roughly $200,000 in grant money to get through, money he put straight back into buying feed for his animals, he said.
Most farmers in the U.S. were not so lucky.
The program was a major boon for Midwest Corn Belt farmers, but in 19 states, including Connecticut, fewer than 25 percent of farmers received a payment.
The numbers are glaring.
Other major agricultural states also had small percentages of their farmers benefit: 19 percent of Florida farmers got a payment, along with 28 percent of farmers in California and Texas and 34 percent in Georgia.
Asked about these numbers, the USDA said it had identified gaps and disparities in assistance both by the commodity being produced and by the type of production or farmer.
On March 24, U.S. Secretary of Agriculture Tom Vilsack announced changes to the program going forward and additional outreach to minority farmers, underserved producers, and smaller and medium operations.
“The pandemic affected all of agriculture, but many farmers did not benefit from previous rounds of pandemic-related assistance,” Vilsack said. “The Biden-Harris Administration is committed to helping as many producers as possible, as equitably as possible.”
Since the pandemic struck, Congress directed an unprecedented flood of federal aid to prop up American farms and the food systems they supply. In addition to the USDA relief program, the federal government also took the unusual step of opening the Small Business Administration’s pandemic programs to agriculture businesses, although these programs are usually closed to farms.
A CTInsider analysis found American farms have received over $23.8 billion in direct pandemic farm relief payments through CFAP and over $14 billion in Paycheck Protection Program loans to farms.
Just as bigger, well-connected companies gobbled up large amounts of PPP loan money before main street shops could get in line last spring, the USDA CFAP program disproportionately favored some types of farmers.
Many specialty crop producers — like fruit and vegetable growers — do not typically receive USDA subsidies and were initially left out of the program. When they were later added in September, some may not have known they were eligible.
“Entire segments were excluded like biofuels, or even within livestock producers, there was no compensation for farmers that were forced to euthanize animals while processing facilities were closed,” the USDA told CTInsider.
For smaller farmers in particular, completing paperwork to attest for each row of onions or carrots was not worth the smaller pay-out compared to the thousands of dollars received by large mono-culture operations.
How we reported this story
By Emilie Munson and Kyle Ogilvie
CTInsider used the Freedom of Information Act to obtain payment data for all USDA Coronavirus Food Assistance Program payments made since the program launched on May 26, 2020 until it closed the second round of payments on Dec. 11, 2020. We received our data from the USDA on Jan. 5, 2021.
We analyzed the data set to determine the number of unique farmers who received payments based on the address and name of the payment recipients (if two people with different names received payments at the same address, they were counted as two farmers).
Then, we compared this information to the number of farmers in all 50 states using data from 2020 State Agriculture overviews published by the National Agricultural Statistics Service at the U.S. Department of Agriculture.
In addition, the CTInsider analyzed the U.S. Small Business Administration’s Paycheck Protection Program data to identify how many farmers used this pandemic relief programs too. We used the North American Industry Classification System (NAICS) codes attached to each loan to identify how many loans went to the sector called Agriculture, Forestry, Fishing and Hunting. We obtained our PPP loan data from the SBA on April, 15 2021.
Bryan Hurlbut, Connecticut’s Agriculture Commissioner and former state director of the FSA in Connecticut, said “the system is kind of skewed against us.”
“If you look at Nebraska, they’re corn and soy and small grains. All those farms have intimate relationships with their Farm Service Agencies (FSA),” said Bryan Hurlbut, Connecticut’s Agriculture Commissioner and former state director of the FSA in Connecticut. “They’re repeat customers. They register their acreage every year. Quite honesty, it’s a lot easier to register their acres because they are big square blocks… there’s a Connecticut dairy farmer whose got 1000 acres and it’s spread over 100 different parcels of land. It’s just very hard and time consuming for them to register their acres, to do their reporting, to capture that data appropriately.”
Connecticut’s aquaculture industry — like the many oyster farms up and down the coast — was devastated by restaurant closures during the pandemic, but was left out of CFAP at first.
Later after advocacy from the Connecticut congressional delegation and other members of Congress, these farmers and others were allowed to participate in the second round of the program that launched in the fall of 2020. But still many small farmers and some farm types were left out.
“There was a lot of need early on and I don’t know that we met that need early on,” Hurlbut said.
The USDA reached out to many farmers through their newsletters, emails and other announcements, as did other agricultural groups, but farmers who don’t usually have contact with the USDA may have been less likely to hear about it.
“I can’t say I was aware of it,” said Ray Holden, vice president of the New Haven County Farm Bureau, who has a 15-acre farm in Orange. Holden and his wife raise beef cows and other animals and grow hay and corn, with most of their business coming from school group visits and birthday parties held at the farm. With those events canceled, their income was slashed.
“I don’t apply for those grants so I would have skipped right over that,” he said.
Joan Nichols, president of the Connecticut Farm Bureau, said her organization worked hard to spread the word, but they haven’t received a lot of calls or complaints about the program since.
“Our phones weren’t blowing up,” she noted.
The pandemic had varying impacts across agriculture markets at various times. Early on, some farmers plowed crops under because COVID-19 disrupted their supply chains. With virus outbreaks at meat processing plants, some farmers struggled to process their livestock.
Produce, like apples and onions, that could be stored for a time, fared better than products that had to go to market quickly, when closures of schools and restaurants upended the markets. Meanwhile, some farmers who sold through farm stands and other local means saw an uptick in demand from customers at home.
Many farmers had new costs — from personal protective equipment to extra marketing.
The objective of CFAP was to mitigate actual production and marketing losses sustained by each agricultural commodity sector. Farmers didn’t have to prove any personal losses to get a payment; they just needed to fit into a category that the USDA determined was eligible based on a variety of factors.
Farmers could get up to $250,000 in the first and second rounds of the program, while corporations could get up to $750,000 under certain conditions. You generally qualified if you made up to $900,000 a year in income. The payment was taxable.
Some smaller farmers said they did not apply although they were eligible because they personally had decent sales during the pandemic.
Elizabeth Higgins, a business management specialist who works with fruit and vegetable growers at Cornell Cooperative Extension, said she had to coax some skeptical farmers to apply.
“I did have farmers who were saying they were having a very good year — so were soybean farmers in the Midwest and they are lining right up. This program is not about whether you personally are having a good year,” Higgins said. “Commodity crop farmers are more used to that.”
In contrast, she added that she knew of farmers in the Midwest who made sure to maximize their CFAP payments by applying for each owner in their general partnership jointly-owned business to receive a payment – something permissible under CFAP rules in some circumstances.
The Congressional Research Service (CRS), a non-partisan government entity, that studied the program reported to Congress that CFAP’s implementation methodology failed to incentivize participation by all affected agricultural sectors and all injured producers in those sectors — in particular, small farmers, processed food commodities, and aquaculture producers.
Moreover, CRS found even after changes were made to the program, the USDA’s formulas and eligibility criteria resulted in row crops like corn and soybeans receiving the largest share of the payments, a share that greatly exceeds their average national output value.
In Connecticut, dairy farmers received the most benefit from CFAP by far, followed by corn and cattle in round one of the program, according to a data dashboard compiled by the USDA. In round two, sales commodities — like fruit and vegetables and aquaculture — edged into first place for funding, followed by milk and tobacco, the USDA’s dashboard shows.
In Connecticut, CTInsider found the over 5,000 farmers left out of the program fit a few profiles. The state is home to thousands of small family farm operations, which may not have been eligible due to their commodity type or may have been less likely to hear about the program or know they could apply.
Keith Bishop, CEO of Bishop’s Orchards in Guilford, said he heard about the program but he didn’t act immediately on it because the USDA doesn’t usually cater to farmers like him.
“Since we are specialty crop growers, and those crops don’t get much attention or support as do the ‘typical’ USDA commodity crops, we have not applied for any [Farm Service Agency] payment programs in two decades. Our paperwork was many years out of date with FSA to be able to be immediately eligible,” Bishop explained. “The conservation compliance provisions would need to have more understanding for me to sign and [get the] paperwork completed.”
Now after a “painful” year of low apple prices, damage from Tropical Storm Isaias, shutting down his farm wine bar and working to keep his over 100 employees healthy, Bishop said he will take another look at it.
Dana Assard, who has a 100-acre farm in Bethlehem where they raise cattle, pigs and chickens, said she only heard about the program when her friend and county farm bureau president called her. She and her husband looked into it, but decided not to apply.
“You apply for stuff like that and it just gets pushed off and you never get it and he just doesn’t really believe in all the grants,” Assard explained. “It’s a lot of paperwork and a lot of running around to get it done.”
Robert Maddox, owner of Sun One Organic Farms in Bethlehem, read about the program in an email — and then called five other farmers urging them to apply. He felt it was “dumb luck” that he clicked on the right email and heard about it.
“The vast majority of farms would take the initial assumption that I have that this is just for corn, soybeans, wheat and dairy,” he said. “It’s rare that there is something out there for fruit vegetable growers… I think what the lesson learned is just because you put it an email, you can’t assume that people will always read their email.”
Peter Sepe, a sheep farmer in Sandy Hook and president of the Fairfield County Farm Bureau, said, “I’ll be honest. We were qualified right from the beginning, right from the outset [but] it takes some deciphering to understand if you’re qualified.”
Sepe said his CFAP payment helped tide him over while he chased down invoices from struggling restaurants that bought his lamb.
Hurlbut said he has not spoken to USDA Secretary Vilsack about Connecticut’s low participation rate in the CFAP program but “we probably should.” The USDA is already implementing new efforts now to try to boost participation.
On March 24, USDA announced it would reopen CFAP for more applications and add a new focus on getting the payments out to farmers who had been missed.
The USDA said it would spend $2.5 million to improve outreach to farmers who had been overlooked. It also announced it would direct $6 billion to develop new programs or modify existing ones to offer further assistance to dairy farmers, specialty crops, beginning farmers and organic farmers, among other measures.
Kyle Ogilvie is a volunteer data consultant with the non-profit DataKind DC who supported this investigation through a partnership between DataKind and the National Press Foundation.
[email protected]; Twitter: @emiliemunson